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Tag: State Owned Enterprise (SOE)
As long as government’s cadre deployment policy is defended, governance of South Africa’s state-owned entities (SOEs) will remain vulnerable and at risk. This is a reaction to the testimony of President Cyril Ramaphosa before the Zondo Commission of Inquiry into State Capture, who acknowledged that 'massive system failures' with board appointments paved the way for SOE failures. At the same time, the President defended cadre deployment.
Every Budget is preceded and followed by the mantra that the Finance Minister faced serious challenges. No, that is never true. All Budgets are easy and straight forward. If they promote prosperity, then countries, including governments and the poor, get rich. All that’s needed is for Budgets to raise rather than lower economic freedom scores – more freedom, more prosperity; less freedom, more poverty. It is that simple.
Finance Minister Tito Mboweni’s budget has been received very positively, as demonstrated by the reaction from markets. SA Inc companies have rallied, the rand initially strengthened, and even the bond market is acting positively. However, while there are notes of hope, this budget also demonstrates a number of key risks, overly optimistic assumptions and potential weaknesses, pointing to an extremely challenging path ahead for the country.
The 2021 Budget was tabled to Parliament on 24 February 2021 by South African Finance Minister Tito Mboweni.
President Cyril Ramaphosa recently told the World Economic Forum he intended to break up Eskom’s monopoly over energy. Eskom’s reputation, around the world is one of corruption and mismanagement, so something must be done.
We have noted the ruling by the Supreme Court of Appeal (SCA) that declared the PPPFA Regulations of 2017 invalid and confirm that the ruling has no effect on the B-BBEE Act, as amended, and its requirements. The B-BBEE Act permits organs of state or public entities to set B-BBEE qualification criteria for procurement and other economic activities and to exceed the criteria set in the Codes of Good Practice through section 9 (6) of the B-BBEE Act.
The Minister of Finance, Tito Mboweni, delivered his much anticipated Medium-term Budget Policy Statement (MTBPS) on Wednesday, 28 October 2020. Hard choices and reform implementation are key to achieving five-year stabilisation plan.
Although the 2020 Medium Term Budget Policy Statement stated its intention to prioritise economic recovery and fiscal consolidation in order to support President Ramaphosa’s economic recovery plan, the reality is that while this budget hit some of the right notes, it did little to instil confidence that the country is on the path to economic recovery.
The captain of Ship SA, President Cyril Ramaphosa, can surely see the iceberg that we are heading for and one can almost hear the call go out for us to 'brace for impact'. The iceberg is an economy that is in crisis – an unemployment rate of 42% (using the expanded definition), GDP growth projections down by 7.8%, tax revenue projections at R304 billion less than originally budgeted for, a budget deficit of R709 billion for 2020/21, a current debt to GPD level of 81.8% and debt service costs (interest) currently amounting to 21c in every tax Rand collected.
The June Supplementary Budget had already made it clear that South Africa was in a dire financial state. So, from that perspective, Finance Minister Tito Mboweni’s Medium Term Budget Policy Statement (MTBPS) offered very little in the way of surprises.